The incident comes after a teenager from an affluent harbourside suburb allegedly flashed a pistol on a Sydney train after another passenger confronted him about his rowdy behaviour, AAP reports. A male passenger watched the 16-year-old trying to force his way into the unoccupied rear driver's cabin of a city circle train on Monday night, NSW Police said in a statement released today.

The man confronted the teenager who allegedly lifted his shirt to reveal a gun tucked into his waistband.

The alarmed passenger got off the train at Museum Station and called authorities.

Police investigations led them to a home in Mosman on Sydney's north shore where the teenager was arrested on Thursday afternoon.

GUNS DRAWN IN DRAMATIC CBD ARREST

Terrified bystanders watched on in shock as heavily armed police arrested a man who threatened to "shoot everyone" on a Melbourne tram.